Archive for September, 2014

Big Changes in UK Online Poker as Regulations Come Into Effect

Thursday, September 25th, 2014

September 16th marked the passing of the first main deadline associated with the newest UK gambling regulations. This Tuesday marked a deadline for online poker rooms to apply for a UK online gambling license. 

The deadline is in anticipation of October 1st, when the Gambling (Licensing and Advertising) Act becomes active. Online gambling companies of all types – poker rooms, casino games and sports betting sites - must all obtain a UK license before the start of October if they wish to continue operating.

There is one further main consequence of this legislation, which won’t come into effect until December 1st. There will be a point of consumption tax on gross profits from any online gambling operator. This tax is 15%, and while it is unclear how this will affect poker room operations, it’s possible that they will increase rake or cash out fees.

What are Poker Rooms Doing?

The added expense and licensing process has already forced many small operators to shut down their poker and gambling platforms. However, most of the big brands will continue to operate as normal, so players will not see too much of a change as a whole.

Pokerstars, Full Tilt, Partypoker, 888 and Unibet are all expected to continue operating in the UK, assuming there are no hiccups with the licensing process.

Sites on the iPoker network on the other hand are choosing both options. Most of the major sites plan to continue operating, most notably Winner and Titan, which have both launched a localized version of their site on .co.uk domain extensions. Mansion poker, however, is one of the first well-known casualties so far. The popular iPoker site closed down right before the application deadline, as of September 15th.

The iPoker sites that are adapting to the changing situations, Titan and Winner so far, are both owned by PT Entertainment Services, a subsidary of Playtech. Playtech is known for their poker software and ownership of poker rooms. The current users of the sites have been transferred over without any significant difficulties.

Due to the structure of the legislation, the rooms continuing to operate need to have an intermediary license until the UK applications are evaluated and accepted or rejected. Titan and Winner Poker are bth using an Antigua license, which is one of a few different valid options for now.

Online poker in the UK is changing in a major way behind the tables, but if all goes as expected, there shouldn’t be too many differences for the average player. We will keep you informed if rake, fees or related operations are changed in the future because of this legislation.

Betfair Faces New Obstacles in New Jersey as Trump Casino Closes

Thursday, September 18th, 2014

Betfair has been well-known in the online gambling industry since its inception. However, the legislation associated to online poker (and gambling) across the U.S. and many other countries has had a big impact on the success of Betfair’s revenue and options. The company was set to team up with Trump Plaza, a New Jersey casino, but it has recently been revealed that this casino is set to close. 

Operating an Online Gaming Site in New Jersey

New Jersey has always been a popular place to gamble, which is why it’s one of the main centers of attention in the battle for online poker legislation in the U.S.

Due to recent legislature, online gambling sites must currently hold an Internet gaming permit (IGP) in order to operate legally. The problem, however, is that only land-based casinos are eligible to apply and receive an IGP. The solution that online gaming sites have to employ is to partner with existing casinos and work out a licensing deal.

Originally there were 12 casinos that were permitted to apply for an IGP in 2013, the year the legislature was passed. This number has already been drastically cut down in 2014, projected to be at only seven casinos by the end of the year. The limited amount of casinos in the state compound the problem for Betfair.

With the closure of Trump Plaza and its casino, Betfair now needs to find a new partner if they want to continue operating in New Jersey. Given the overall presence of Betfair in the state, along with how much money they have invested, it’s likely the Betfair will attempt to find a new ally. However, this may not be easy or feasable.

The company has several obstacles in its way now. There are no casinos left, of those seven that have not paired with online gambling sites or are. Of these casinos, most have no incentive to enter a partnership with Betfair, as they already have significant exposure for their brand. Considering that Betfair’s main asset in this situation is their brand recognition, it is unlikely they will want to operate under a different name.

On top of these challenges, Betfair hasn’t had great success in New Jersey so far. For this year, they have achieved a revenue of $3.6mm, which may sound impressive, but is actually the worst in the New Jersey iGaming industy.

With very few options and not being able to bring too much to the table, Betfair may have to pay exorbitant licensing fees to potential suitors in order to continue operating. That being said, there is still room for growth in New Jersey’s poker and gambling industry, so future earning projections may make a deal that is difficult in the short term a good long term decision for the gaming giant.